The one place Oregon has acted to tart itself up and throw itself at any stinking smokestack is in biofuels production.  Check out this tremendous summary of just how staggeringly costly and counterproductive ethanol is — JUST at the federal level … (editorial emphasis added):

Despite Its Huge Flaws, Ethanol Is Political Holy Water in DC

By Robert Bryce, The Washington Spectator

Posted on July 7, 2007, Printed on July 7, 2007
http://www.alternet.org/story/56047/

Ethanol is a magic elixir. It allows politicians and political operatives to promise voters that America can achieve “energy independence.” In this new energy Valhalla, American farmers will be rich, fat and happy, thanks to all the money they will be making from “energy crops.”  Better yet, U.S. soldiers will never again need to visit the Persian Gulf–except, perhaps, on vacation. With enough ethanol-blended motor fuel, America can finally dictate terms to those rascally Arab sheikhs with their rag-covered heads, multiple wives and supertankers loaded with sulfurous crude.

. . .

Inconvenient Facts

First, the subsidies.  Making ethanol from corn borders on fiscal insanity. It uses taxpayer money to make subsidized motor fuel from the single most subsidized crop in America.  Between 1995 and 2005, federal corn subsidies totaled $51.2 billion.  In 2005 alone, according to data compiled by the Environmental Working Group, corn subsidies totaled $9.4 billion. That $9.4 billion is approximately equal to the budget for the U.S. Department of Commerce, a federal agency that has 39,000 employees.

Need another comparison? That $9.4 billion is nearly twice as much as the federal government spends on WIC, short for the Special Supplemental Nutrition Program for Women, Infants and Children, a program that provides health care and nutrition assistance for low-income mothers and children under the age of five.

. . .

But the ethanol lobby isn’t satisfied with the subsidies paid out to grow the grain. They are also getting huge subsidies to turn that grain into fuel. According the Global Subsidies Initiative, meeting Bush’s goal of producing 35 billion gallons of renewable and alternative fuels per year by 2017 will require total subsidies of $118 billion. The group claims that the $118 billion price tag “would be the minimum subsidy” over the eleven-year period.  In a report released on February 9, the group said that adding in tax breaks that the corn distillers are getting from state and local governments and federal tariffs imposed on foreign ethanol (mostly from Brazil) “would likely add tens of billions of dollars of subsidies” to the $118 billion estimate.

Despite the subsidies, ethanol has always been more expensive than gasoline. Between 1982 and 2006, the price of ethanol never dropped below that of gasoline–even though ethanol contains just two-thirds of the heat energy of gasoline. That lower energy content means a car using ethanol gets worse gas mileage than one that uses gasoline.

The second problem: no matter how you slice it, ethanol production is just too small to have a significant effect on the overall energy market in the U.S.

. . .

Alas, cellulosic ethanol is like the tooth fairy, an entity that many people believe in, but no one ever sees. Despite years of hype, there is no significant production of cellulosic ethanol, except in very small, non-commercial distilleries. Maybe that’s a good thing, because the more ethanol that’s burned in American automobiles, the worse the air quality gets–a fact that leads to the third problem.

. . .

The negative health effects of ethanol-blended gasoline have placed the EPA in the odd position of enforcing rules that run directly counter to its stated goals. On its website, the agency says that “reducing emissions of NOx is a crucial component of EPA’s strategy for cleaner air.” Nevertheless, when asked about the higher emissions related to ethanol, EPA spokesperson Jennifer Wood insisted that they are “very minimal increases.” She also told me that the agency has other “tools under the Clean Air Act to reduce NOx.”

. . .

The Grocery Tax

While Americans are breathing more polluted air due to ethanol, they are also paying more at the grocery store, a fact that leads to the fourth problem: ethanol is increasing food prices.

. . .

Ethanol boosters claim that ethanol is part of the prescription for energy independence–a concept that polls extremely well. The idea of energy independence appeals to a wide range of voters from the left and the right. The result: almost anything that promises to move America toward that goal–a goal that is neither achievable nor desirable because of the enormous costs it would entail–quickly garners wide support and massive subsidies.

. . .

Given those numbers, it’s hardly surprising that a January 2007 poll found that 92 percent of Iowa voters believe ethanol is important to the state’s economic future. That’s explains why “when politicians come to Iowa, they have to say ethanol is great,” says Iowa State University political science professor Steffen Schmidt. Alas, what makes the ethanol business great for 3 million Iowans is bad for 297 million other Americans: It’s bad for taxpayers, bad for air quality, bad for people who like to eat, and it will have no real effect on America’s overall energy mix.

Aside from those little quibbles, ethanol truly is a miracle potion. Expect to hear more about it as the presidential campaign continues.

This entry was posted on Friday, July 6th, 2007 at 10:58 pm and is filed under Economy, Energy Future, Environment, Tax Reform/Tax Fairness. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.